The probate process can be a long and costly one for those administering estates with extensive or complex property. That’s a key reason that California residents take advantage of estate planning strategies like revocable living trusts, gifting assets while they’re alive and adding intended beneficiaries to a home deed or bank account.
California law has allowed those administering “small estates” to use a streamlined probate process where property is transferred via relatively simple documentation to family members or other beneficiaries. However, up until last year, a small estate was considered one that had $184,500 or less in “probate assets.” Probate assets are ones that aren’t passing directly to a beneficiary, like an investment or retirement account with a designated beneficiary listed. That threshold basic excluded estates that included a home, given the cost of residential property in many parts of the state.
How has California law changed?
That’s why last year, the law was changed to increase the definition of a small estate significantly – and specifically to include more California homeowners.
The law now allows a threshold of $750,000 for “real property” as long as that property was the deceased’s primary residence (in other words, not a vacation home or investment/rental property). Further, other probate assets may not exceed just over $200,000. These amounts are set to increase periodically with the Consumer Price Index (CPI).
This change in the law certainly allows more Californians to take advantage of the streamlined probate process that saves time and money and helps beneficiaries get their inheritances faster than if there was a probate process dragging out months or even longer.
However, many more people can help ensure that most of their estate avoids probate completely with a multitude of other estate planning tools. An experienced legal professional can help review and implement options for doing just that.
